27 October 2004

Mittal forms world's largest steel firm

By Fionnán Sheahan, Political Correspondent
Irish Examiner 27/10/04

THE last owners of Irish Steel, who have refused to pay the clean-up costs of their former Irish site, are set to form the world's largest steel company in a €14 billion deal.Lakshmi Mittal, one of the wealthiest men in Britain, and the former owner of the Ispat International site at Haulbowline, Co Cork, will merge his family's steel assets and buy the US based International Steel Group Inc.

The €14bn deal will create the world's biggest steel company, with operations in Europe, Africa, Asia and the United States. Analysts say the enlarged group will be worth €16.5bn. Mr Mittal's company is refusing to accept any responsibility for the constantly escalating costs of the €30 million clean-up of waste at the former Irish Ispat site in Cork Harbour.

Irish Steel closed in June 2001 with the loss of 450 jobs, after Ispat International bought the plant from the State for just £1 in the mid-'90s.

Ranked as Britain's fifth-richest man in 'The Sunday Times Rich List', Mr Mittal's personal fortune is believed to be in the region of €5bn.

According to Green Party TD Dan Boyle, Ispat and Mr Mittal have been allowed by the Government to walk away from their obligations at Haulbowline. "He seems to be largely in the clear. There is still a kid gloves approach there from the Government's side. I think on many levels there was room for a case to be taken," Mr Boyle said.

The clean-up operation has started and involves the removal of 80,000 tonnes of toxic material and a million tonnes of non-hazardous sludge. The €30m cost could yet turn out to be a conservative estimate.

"I would have thought that European competition laws at least would allow for a challenge. The company's market position was arguably subsidised by the Irish taxpayer and the British taxpayer," Mr Boyle said.

Netherlands-based Ispat International, 77% of which is owned by Mr Mittal, will buy the Mittal family's LNM Holdings to form a new company called Mittal Steel Co. The new Mittal Steel Co will then pay about €3.5bn to the shareholders of the Ohio-based International Steel Group. Mittal Steel will have operations in 14 countries, employ 165,000 people and have up to $1bn in capital expenditure this year.

"The combined Mittal Steel will be the largest and most global steel company in the world and will be listed on the New York Stock Exchange and Euro-next Amsterdam," Mr Mittal said yesterday.